Global Depositary Receipt

Global Depositary Receipt (GDR)

A receipt on shares of a foreign company when funds are simultaneously raised in two or more markets.

Global depositary receipt (GDR).

To raise money in more than one market, some corporations use global depositary receipts (GDRs) to sell their stock on markets in countries other than the one where they have their headquarters.

The GDRs are issued in the currency of the country where the stock is trading. For example, a Mexican company might offer GDRs priced in pounds in London and in yen in Tokyo.

Individual investors in the countries where the GDRs are issued buy them to diversify into international markets. GDRs let you do this without having to deal with currency conversion and other complications of overseas investing.

However, since GDRs are frequently offered by newer or less-known companies, the prices are often volatile and the stocks may be thinly traded. That makes buying GDRs riskier than buying domestic stocks.

The Bank of New York Mellon's Depositary Receipt business is conducted through The Bank of New York subsidiary, which acts as depositary for more than 1,300 American and global depositary receipt programmes.

Second phase: An increase of up to 25 per cent of the current paid-up share capital through the issuance of new shares, in the form of Global Depositary Receipts, to be held by a strategic shareholder being the depository bank, and the Global Depositary Receipts to be listed on the London Stock Exchange.

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